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Cheap Travel: How To Get The Most For Your Travel Dollars

This post is from staff writer Sierra Black. Sierra writes about frugality, sustainable living, and getting her kids to eat kale at Childwild.com.

Travel has always been a priority for me. I love seeing new places, experiencing new cultures, and just getting away from the routines of my daily life. Even more important, my family and close friends are a pretty far-flung crowd. I have loved ones spread from Boston to Buenos Aires. We buy a lot of plane tickets in my family. We buy so many tickets that I should have become savvy about how we buy them much earlier than I did.

For years, I’ve mainly just flown with JetBlue. I use Farecast to see if there’s a better deal available elsewhere. If there’s not a significantly cheaper ticket on that site, I buy my ticket through JetBlue. They generally have low fares and a good frequent-flyer program. This is a pretty simplistic approach. Since I’d never researched it carefully, I didn’t know if I was really getting the best deals on my travel.

Now, my best friend is moving to San Francisco. (Yes, between losing my cat and my health problems and my friend’s move, it’s been a doozy of a month). I’m suddenly looking at traveling a lot more than I already do! Figuring out how to squeeze a few trips a year to the West Coast into my budget is a challenge. Before I overhaul my other spending areas, I wanted to find out if I could get more travel for the same amount I’m already spending. Maybe I can make my existing travel budget take me further — literally.

Maybe. As far as I can tell, there are two essential components to getting the best possible deals on air travel:

Finding the lowest fares, and

Using rewards travel programs

Both are complex tasks, fraught with potential pitfalls.

Finding Low Fares
Finding the cheapest tickets is a clear starting place. Airlines compete with each other primarily on fares. Who would want to pay more for the same service? Of course you’ll buy the lowest fare you can find, all else being equal. Unfortunately, the golden age of finding cheap fares easily online is coming to an end. The New York Times recently published a fascinating story about how airlines are pulling their fare listings from sites like Orbitz and Expedia. Some carriers, like JetBlue, are using new media like Twitter to advertise their best fares, which they sell only through their own websites.

To find the best fares, the New York Times recommends starting with ITA software, a small company that provides the technological background for a number of popular travel sites. You can cover your bases to find deals they may have missed by also checking out meta-sites like Kayak.com and FareCompare.com. Another site the New York Times says is worth checking out is AirfareWatchdog.com, where real people collect information about cheap fares, sometimes catching special deals the bigger, automated sites have missed.

If you care about features other than price, you may want to pay a visit to Hipmunk.com, which uses an “agony index” to help you find the best value on a flight, taking into account not only price but duration and number of stops.

Using Rewards Travel Programs
Once you’ve found your airfares, there’s the question of how you’ll pay for them. Will you just reach into your wallet for cold hard cash, or try to deploy one of the many “travel rewards” programs out there. I’ve always done the former, and am now starting to explore the latter.

Travel rewards programs aren’t exactly as free as they might at first appear. They seem to come in basically two forms:

Frequent-flyer rewards programs run by a particular airline to reward customer loyalty, and

Credit-card rewards programs that let you earn miles to be used on any airline.

I mentioned that I’ve used JetBlue’s frequent flyer program. They recently changed it to a points system not unlike the credit card travel rewards program.

He’ll need those extra points if he wants to earn a travel reward, because the threshold for getting a $200 airfare voucher is 41,000 points. Even at the triple points rate, we’d have to spend $15,000 to earn one one-way ticket from Boston to San Francisco. JetBlue’s deal with American Express is a little better, offering up to 8 points per dollar spent if I buy my tickets through Jet Blue. Even so, I’d have to spend well over $10,000 to earn a free flight cross country.

At first those numbers seemed prohibitively high. Then I looked at how much my household spends each month on living expenses. If I funneled all that money through one of these rewards credit cards, I’d get two or three reward tickets a year. That’s not as good a return on my “investment” as I was hoping, but doing it through my bank’s program doesn’t cost me a thing. I spend that money anyway; I may as well get the travel coupons!

Getting a rewards credit card is a more complicated proposition. The interest rates are higher than I’m used to: in the mid-teens even for someone with excellent credit. They carry an annual fee of around $40-$50 as well. If I’m going to use a rewards credit card, I need it to really pay for itself.

To make things even more complicated, there’s now a website, Points.com, that lets consumers exchange points from frequent flyer and consumer rewards programs. You can log in for free and swap your JetBlue travel points with points in American Airlines frequent-flyer program or a few other airlines. That expands your options when searching for the lowest fares: you’re less likely to have to choose between taking the very lowest fare and paying a little more for an airline you’re building frequent flyer credit with.

Getting Started with Travel Hacking
I plan to route most of my household expenses through my bank’s existing rewards program, taking advantage of that three-points-per-dollar rate. I decided to try JetBlue’s rewards AmEx deal for my travel purchases because I usually fly with them, and the way they couple the rewards program with their frequent-flyer program makes it likely I’ll get a benefit from it. If I don’t, I’ll cancel the card next year.

The effort I put in to maxing out my travel dollars might bring huge rewards. Hopefully in the form of plane tickets to San Francisco to see my friend and her family. But it will clearly cost me some substantial time and brain power. I’m going to try it for a year, and see if it pays off. My hunch right now is that just traveling on JetBlue and using their rewards program may well be nearly as cost effective, with far fewer hassles.

Tip: For more about cheap travel, check out the brand-new Travel Hacking Cartel, which is designed to help novices learn how to make the most of frequent-flyer miles.

Another great airline is Allegiant Air. They do not fly everywhere, but if they have the route you’re looking for, they are extremely cheap! Round-trip fees within the U.S. are typically lower than $200 round trip, after taxes.

My wife and I just recently moved as well! We saved quite a lot of money by selling our furniture and renting a much smaller truck. Once we need furniture again, we’ll probably buy it used.

I gave up on the ever changing reward cards and airlines FFPrograms. The Costco American Express card is now my favorite! If only AMEX was accepted in as many places as Visa and Mastercard it would be my only card!

My wife and I are most interested in international travel these days. One of my “hobbies” is figuring out how to take a really nice vacation for a not-unreasonable price. (I’m not going to say cheap, because it’s not.) For instance, my wife and I went to Southeast Asia for five weeks over Xmas and New Years. We flew Business class from JFK to Bangkok for $2300/pp. Cheap? No. Excellent deal? Absolutely. Considering we got a lie-flat bed for 20 hours in each direction, I was satisfied. We stayed at a $450/night resort for $40/night over Xmas. You get the drift…

What’s my secret? I work frequent flyer programs to the max, and I’m not a frequent flyer. My “go to” credit card is my Starwood Preferred Guest American Express card, and Starwood points go a long way in Asia. Most of our hotel stays were on Cash and Points rates where we paid on average $43/night (plus points copays, usually around 2000 points/night). And these are for 5-star accommodations. We ended up staying at some local places along the way and paid cash for some nights where I might have used points because the rates were really reasonable.

Coming down the pipeline:
Sign-up bonuses from two Citibank American Airlines credit cards — 200,000 points, enough for two round trip business class tickets back to Asia. Also, two 50k sign-up bonuses with United/Continental’s cards, good for two economy tickets to Europe. If we go once every two years, we won’t have to pay for airfare for our international vacations for the next few years.

Granted, it’s easier for us because we take one big vacation every so often, so for us, one big deal every couple of years makes a HUGE difference, whereas Sierra is looking at buying multiple domestic tickets per year, and one deal just isn’t that much. (That said, 200,000 American points is enough for 8 domestic round trip tickets…)

Airline credit cards are what got me into rewards credit cards to begin with. I had never given them much thought before, but after college I was expected to pay for my own flights halfway around the world to see my extended family. I opened a USBank NWA rewards card.

I started funneling all spending that I could to the card, and paid the balance in full so I didn’t suffer from the higher interest rate. I also typically spent enough that the annual fee was waived. But I figured out pretty quickly that I wouldn’t be getting a free flight to South Africa anytime soon.

After opening some different rewards cards as well, I discovered that taking my rewards as cash is actually more profitable. For instance, if your husband needs 41,000 points at 3 points on the dollar for a $200 flight, he’s earning 1.4% back on his money. I was only earning 1 or 2 points per dollar spent, and needed roughly the same number of points for the same priced flight, so my earnings were often less than 1% – a standard cash back rate. Once I opened the Fidelity American Express 2% rewards card there was never any reason for me to work for miles again. The same spending that would earn your husband 41,000 points would earn me $275.

I don’t often fly Jet Blue, but at 8 reward points that deal might well be worth it. I haven’t ever found anything on an airline I’d use that earned me more than 2 points per dollar spent, and the flights those points afforded have always been valued at less than simply taking 2% on each dollar spent, so I stick to cash rewards!

When my wife and I flew back to NJ to visit family during Christmastime, we found the best rate on cheapoair.com

Ellen had a guest talking about airfaire a few weeks ago. He said that buying 3 months out is the sweet spot. When fares are listed a year ahead of time, the are originally listed for as much as the airline thinks they can get. When seats are still available 6 months before the flight, they start dropping the price. It generally hits buttom at about 3 months and starts to rise again after that.

The guest also recommended Bing to track airfaires. Bing tracks price trends for flights, letting you know if the price is going up or down.

My problem is that all the travel sites start with when and where you want to travel. To my knowledge there is no way to search for example, “I want to go to San Diego, when is the most cost effective time of year to do so.” I also know of no way to determine if you are better off flying Wednesday evening rather than Thursday morning without going flight by flight.

I like going on vacation as much as the next guy, but I prefer to use cashback credit cards. I can use that money the way that I prefer. However, this year I am going to be using those rewards for travel to Hawaii. But the way that I see it, I do not need 41,000 points for a $200 dollar ticket. The one card is straight cash rewards and the other (Capital One) is a points card where 25,000 points is good for $250.

After reading your post, I think that I’m going to have to put in a little more research into finding the right price for my flight.

Thanks so much for the links! I had forgotten about AirfareWatchdog.com – I particularly like how with that site you can just list your departure city but have “anywhere” be your destination. It’s a fun way to find inexpensive international getaways!

This type of article is useful, but I have a hard time taking Sierra Black’s writing seriously. She just seems so naive about personal finance. For example, in a previous article (“Drama in Real Life: When Emergencies Pile Up”, January 6) we learned that she blew her too-small emergency fund on cat medical expenses, and then immediately went out and bought two more cats for her kids (this we know from her linked ChildWild blog). Does she now have an emergency fund for when her kids get sick?

Then, on January 25th (“When To Walk Away From A Bad Mortgage”), an article by Sierra appeared which drew significant criticism from many sources. A lot of these comments were able morality, which is beside the point. What I’m really concerned about is this, as summarized by JD in comment #149:

“After reading all of these comments, my biggest concern is that those in the know seem to think that Sierra’s article is sloppy with the facts. That’s a problem. A few commenters have pointed out that mortgage adjustments aren’t as easy as Sierra makes them sound. Lizzy (#109) is particularly harsh in her criticisms. I wish Sierra were reading the comments so she could respond to them!”

Sierra did respond, but mostly to the moral comments, and did not respond to the technical issues with her article.

In today’s article, she admits that she never searches for deals, and then writes this article on how to find the best ones. Is this a reliable article? I can’t tell. I think I’d look elsewhere if I wanted to find reliable information about this subject.

I have enjoyed learning along with JD even as he makes — and admits — his errors in personal finance. To err is human, after all. But to me it seems like Ms. Black is making gross errors in judgment without acknowledging or even recognizing them at all. I just can’t take any of her research or writing seriously — it just seems too superficial.

I do think she sound naive and new at personal finance but I normally can find something useful. This article gave me the twitter account for jet blue which I had never thought to get. I do disagree with her on using airline reward card, I’ll get cashback, thanks but to each their own.

The twitter tip was useful. We just had a baby so we’re staying around town for a couple of years. I hate flying with babies on board.
I usually use travelocity and the airline’s site to compare fare, but it sounds like that is already changing.

Using credit cards to rack up the rewards points works, but it’s a slippery slope that requires extraordinary self-discipline. You must maintain a zero balance month after month. That’s easy enough once you’ve built up your emergency fund, but I wouldn’t recommend it until you’ve got at least three months living expenses in a savings account.

Do travel agents offer any advantage anymore? Looking at an Australia trip this summer, and the cheapest airfare I can find is $1400 round trip. Thinking about just talking to a travel agent to arrange airfare, visas, hotels, etc. but curious to hear if anyone has experiences. Will I pay a whole lot more?

I’m a frugal 25 year old and have been a member of a frequent flyer program since I was 2. I’m not particularly impressed with this article.

I have a credit card that gives the same $1=1 mile rewards as the author’s husband. However, 41,000 for a $200 voucher is not a good value. I currently have the United Airlines credit card and am a frequent flyer. My three most recent trips were a one way frequent flyer ticket (12,500 miles and $90 return: San Diego to Eugene, OR) a 25,000 round trip San Diego to Chicago, and last night I flew back on a $239 ticket to NY. This along with my credit card earned miles puts me over my 50,000 miles so I could get one ticket, or two “super saver awards” which are only available to those of a certain status on the airline.

By concentrating on one airline instead of saving $50 here and there on random airlines through discount sites, you are earning yourself awards through status as well (free checked baggage, free upgrades to economy plus, etc). I’m not too convinced that this article contains the best advice for frugal traveling.

Useful tips

1. Always buy your ticket on Tuesday during the workday
2. Try to buy 8 weeks in advance
3. Never buy from the same computer that you have window-shopped on. If the website sees your same internet address coming back and looking at the same fare, it will go up. Always look at home, then buy at work from a separate computer to get the original deal you were looking for.

Well its nice that you’re writing better articles, the only article that I didn’t like by Sierra was the one that glorified hitchhiking and squatters. I mean really. Everything else by her is pretty good.

One thing to remember before you funnel your purchases through a “miles” rewards card on the assumption that it doesn’t cost a thing. Remember opportunity costs. Suppose that instead of spending $15,000 on your bank credit card to earn enough points for a free ticket, you instead used a Discover credit card (or another) offering 1% cash back. On $15,000 in purchases, you could have earned $150 in cash. Therefore, using the “miles” credit card didn’t get you a free ticket. It got you a ticket for $150. That might still be savings over a regularly priced ticket, but far from free.

My biggest issue with the post is that Sierra is planning on flying out a few times each year. If you have any credit card debt, you can’t afford those trips. Skype with your friend and email her often but you can not afford to travel that distance to see her. Her reference to the high rate associated with rewards cards makes me think she intends to possibly carry a balance. Dumb, dumb, dumb.

Hmm… I looked into the rewards card hacking thing a while back. Starwoods was one of the better cards. I ended going for a 2% cash back card on EVERYTHING. I also get to run my $25k/yr kids daycare though it. Adds up to at least 1k/year that I can use for anything.

My husband and I use airfare at least once a year, and I’m convinced that there are no bargains out there. Pretty much all airlines that fly to where you are going charge the same thing, although flights may be cheaper at certain times of the year than others. Also, if you are able to fly midweek, it should cost less. Recently, I booked a vacation from Friday to Friday rather than weekend to weekend and noticed fares to be at least $200 less per ticket. I am using AirfareWatchdog, Farecompare and Bing this year (covering all the bases), so we’ll see how that goes, but I normally find that fares tend to go down relatively close (1-2 months) prior to my departure and I can’t make it that long without getting nervous I won’t get a flight. Do you think that’s on purpose?

1. Points.com to swap is an AWFUL AWFUL thing to do. The cost per mile is horrendous.

2. Airline credit cards will often waive the fee for the first year with a sign-up bonus and then if you call to cancel their retention department will waive it again….sometimes for many years.

3. I highly suggest checking out FlyerTalk. If you want to get serious about travel hacking, this is the place to go.

I just did two CC sign-ups and scored two first class tickets to Europe. Fully flat beds, lounge access, etc. Price on the website was a total of just around $40,000. Our cost: $700 in taxes & fees. Less than the crappy coach seats we were going to buy.

Sierra needs to read yesterday’s article on needs, wants and entitlements. 3 trips cross country to visit a friend when you’re in debt? Ridiculous. She’s probably in debt because she says “travel is a priority for me”-isn’t that entitlement?

I don’t like that Sierra encourages travel and cc rewards for someone in debt. WHY WOULD INTEREST RATES MATTER TO SOMEONE WHO PAYS OFF THEIR CARD EVERY MONTH? If you can’t pay off your cards every month you shouldn’t be traveling!

I know we all screw up on our budgets occasionally or are digging out of a financial situation caused by poor choices. It seems like Sierra should be setting a better example or be writing on a different blog.

Well I like that Sierra is writing more positive articles, the only article I didn’t like by her was the one where she talked about hitchhiking because it was frugal. Um no thanks.

Even a policeman would tell you its dangerous and I live in Omaha of all places where crime is lower than in other states, but still it seems to me that no one should risk safety for the sake of frugality.

Amanda: I agree, the whole thing about the rate of the card worried me. If you’re paying it off every month then the rate doesn’t matter.

Dee: I fly American (live in a hub city). They recently had promos for 100K miles. So DH and I each got one. Met the spend qualifications quickly (we put everything on CCs and pay off at the end of the month). Those miles were enough for first class tickets to Rome. Fully flat beds. I didn’t have a lot of flexibility, so I had to fly BA for part of it, which resulted in a little higher fees.

I think one of the problems with Sierra’s posts is that she quite often seems to be writing about what she plans to do instead of what she already has experience doing. Here, she says her efforts “might bring huge rewards.” Well, how about trying this out for a year and then writing the post about whether or not it was worth it. Things always sound better in the hypothetical. The previous post from her about mortgages was similarly about what she planned to do or could potentially do, but was not from actual experience.

As someone pointed out, getting miles as rewards is often less lucrative than just accumulating cash back, so she could be losing money by choosing miles instead of other rewards. I would have liked a detailed comparison of her rewards cards as to how getting the airline voucher compared to just getting cash back and using that money to purchase a ticket instead. Potentially getting miles instead of cash justifies taking the trips more than might be warranted.

Another thing, having a friend move away is always really sad, and you always think that you’ll travel to see them often. I feel for Sierra. But it usually doesn’t work out that way. I suspect that Sierra does not end up actually flying to San Francisco several times a year, as time and money constraints, plus having a family, will likely make that unrealistic. She’s making these plans while the emotions are still really high.

I appreciate Sierra writing about her personal life and would encourage her to try some experiments and get some experience with some of her ideas and then write an analysis of what happened, rather than just telling us about her plans.

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